June 20, 2024

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This key measure of inflation rose at the fastest pace since 1982 last month

This key measure of inflation rose at the fastest pace since 1982 last month
A price index that tracks consumer spending rose 6.1% between January 2021 and January 2022, according to new data from Department of Commerce Released on Friday. This was the largest annual increase since February 1982.

Excluding food and energy costs, which tend to be more volatile, prices rose 5.2% over the same period. It was the fastest progress since April 1983.

For January, prices rose 0.6%, or 0.5% excluding energy and food, in line with economists’ expectations but at a faster rate than the previous month.

The Price Index for Personal Consumer Expenditure, or PCE, is the Federal Reserve’s preferred measure of inflation. Maintaining price stability is one of the Fed’s main tasks. Federal Reserve Chairman Jerome Powell hinted in January that he would start raising interest rates To combat high inflation in the era of the epidemic. The first such rate hike is expected at the central bank’s March meeting. It is possible that Friday’s report did not change that course.

Steady entry but high prices

Friday’s data release shows that January was not an interesting month for Americans. While income did not budge, prices – and thus spending – rose.

This was the worst month for personal income since September, when it actually declined. Income available for spending rose 0.1%, also the worst performance since September.

The report also showed that consumer spending rose 2.1%, reversing the downward trend from December. In fact, it was the best month to spend since March of last year.

This is an evolving story. It will be updated

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